The National Labor Relations Board (NLRB) earlier this month issued a decision that calls into question the lawfulness of employer workplace policies that might prohibit certain protected activities like union organizing.  The NLRB adopted a new standard of review for evaluating workplace rules for compliance with Section 7 of the National Labor Relations Act (NLRA), which prohibits interference with workers’ rights to engage in “concerted activities,” including the right to organize and bargain collectively.

The case before the NLRB involved a large-waste disposal company and its unionized workforce.  The parties argued for different standards of review of the company’s workplace rules, which resulted in the NLRB’s rejection of a standard that had been in place since 2017 and replacement with a much more employee-friendly approach. This shift was not entirely unexpected as the current NLRB majority under the Biden administration has been far more active and pro-labor than under the previous administration.

The NLRB’s new standard provides that a workplace rule is “presumptively unlawful” if an employee “could reasonably interpret a rule to restrict or prohibit Section 7 activity.”  Once this presumption is established, “it is the employer’s burden to prove that its legitimate and substantial business interests cannot be accomplished with a more narrowly tailored rule.”

The new standard of review is a departure from the previous rule, which involved a more straightforward analysis of workplace rules.   Since 2017, in reviewing workplace rules, the NLRB balanced the interests of an “objectively reasonable employee” against the employer’s legitimate business justification for the rule.  In applying this analysis, the NLRB established three categories of workplace rules: those that are presumptively lawful, rules that require individual balancing of the employee’s NLRA rights against the employer’s legitimate business justifications, and rules that are presumptively unlawful.

The new NLRB ruling does away with the three categories so that all NLRB challenges to workplace rules will be reviewed independently on a case-by-case basis.

The decision also changes the characterization of the employee’s perspective from that of an “objectively reasonable employee.” Now, the employee’s interest in the protection of Section 7 is described as that of a “reasonable employee who is economically dependent on her employer and thus inclined to interpret an ambiguous rule to prohibit protected activity she would otherwise engage in.”

And, instead of requiring that the reasonable employee “would” interpret the rule to prohibit Section 7-protected activity, it now only requires that an employee “could” have such an interpretation. This is heavily weighted in favor of the employee, as any ambiguity in the rule will be construed in the employee’s favor.  As pointed out in a dissenting opinion of one NLRB member, from this perspective a rule may be considered “presumptively unlawful” even if there is another reasonable interpretation of the rule that does not violate Section 7 of the NLRA.

The presumption will be a challenge for an employer to overcome. The employer will have to demonstrate that the rule was adopted to further “legitimate and substantial business interests” that cannot be addressed by a less restrictive rule.  Previously, the second part of this analysis did not apply and an employer’s interest in the right to maintain discipline and order in their organization could be sufficient, even if the rule was overly broad.

The NLRB also indicated that the new standard will be applied retroactively, meaning rules that were implemented and enforced prior to the decision will be subject to the new analysis.

The ruling will almost certainly be appealed, and it remains to be seen how the new standard will be applied to individual cases.  For now, employers may want to review their handbooks for policies that “could” be seen as limiting employees’ Section 7 rights. Rules governing employee conduct such as civility rules, no solicitation policies, and social media policies are sure to be scrutinized.

Employers should be mindful that the NLRB’s jurisdiction is not limited to organized workforces.  Employees of non-unionized workplaces can and do take claims to the NLRB.

AIM members with questions about employee policies and rules may reach out to the AIM HR Helpline at 800-470-6277.  If members (or non-members) would like to arrange for a review of their organization’s employee handbook for compliance, contact Kelly McInnis at 617-872-3039 or kmcinnis@aimhrsolutions.com.